Non-Banking Financial Companies (NBFCs’ are facing stiff competition in retail financing specially from banks and FIs. Though the evolutionary process of the NBFCs has made them nimble and agile, their main handicap is the small size of their balance sheet, resources and their distribution reach, which is region specific. The limited cushion available to them in times of difficulties pose a great threat to their very survival and restrict their opportunities to grow So to be market-led, one must be customer driven. If the major goal of implementing a Customer Relationship Management (CRM) system is to “improve customer satisfaction,” the management of a business should emphasize three factors: the establishing a CRM committee, obtaining end user involvement and adopting web-based infrastructure. At the end, it is viewed that Non-banks are able satisfy more number of customers during their operations. Introduction
Recent years have witnessed significant increase in financial intermediation by the NBFCs. The Indian economy is going through a period of rapid ‘financialisation’. Today, the intermediation’ is being conducted by a wide range of financial institution through plethora of customer friendly financial products. The segment consisting of Non-Banking Financial Companies (NBFCs), such as equipment leasing/hire purchase finance companies have made great strides in recent years and are meeting the diverse financial needs of the economy. In this process, they have influenced the direction of savings and investment. The resultant capital formation is important for our economic growth and development. Thus, from both the macro-economic perspective and the structure of the Indian financial system, the role of NBFCs has become increasing important. A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 and is engaged in the business of loans and advances, acquisition of shares/stock/bonds/debentures/securities issued by government or local authority or other securities of like marketable nature, leasing, hire-purchase, insurance business, chit business, but does not include any institution whose principal business is that of agriculture activity, industrial activity, sale/purchase/construction of immovable property. Further, a direct linkages with SHGs can ever attract the interest of commercial banks for prolonged periods. It is more likely that most of the commercial banks may rely on indirect linkages through NGOs or SHG federations. At last, for sourcing international funds for Micro Finance Institutions (MFIs), Reserve Bank of India internal panel recommended to the government to consider reducing the threshold limit for foreign direct investment (FDI) for Non-Banking Finance Companies (NBFC)-micro finance institutions (MFIs). The forte of NBFCs has been credit delivery to areas not covered by banks and financial institution (FIs). By virtue of their past experience NBFCs know the tacit needs of retail customers much better and with more sensitivity than others do. As traditional boundaries between different categories of financial intermediaries are disappearing, NBFCs have to face stiff competition in retail financing specially from banks and FIs. Though the evolutionary process of the NBFCs has made them nimble and agile, their main handicap is the small size of their balance sheet, resources and their distribution reach, which is region specific. The limited cushion available to them in times of difficulties pose a great threat to their very survival and restrict their opportunities to grow. The biggest challenge in front of NBFCs therefore is to increase their size. This could be by merging with each other.
Behavior and attitude have to be reviewed, and potentially changed, to create a culture that is conducive for the successful implementation of a Customer Relationship Management...